Managed Transportation Services?

Many shippers think they must select either a transportation management system or a managed transportation services provider when in fact, they get the most bang for their buck when they utilize both from the same company. When the shipper takes advantage of both a TMS and managed transportation services, they are in command. The TMS gives them visibility into their supply chain, and the transportation services provider is responsible for accounting, claims, carrier performance, and continuous improvement. You have the information and the ability to focus on what you do best, while the service provider focuses on what they do best. This strategy has proven to result in the most opitmal ROI and increased customer service levels.

Strengthening vendor compliance encourages vendors to increase their customer service, which is directly passed on to you, the client, and your customers. Implementing lean or JIT philosophies is a priority for most shippers. These philosophies are often not performing at their fullest capacity as many companies must keep excess inventory to reduce risk.

On-Time Deliveries

Late Deliveries

Damages

Lost Product

Redirects/Returns

Ship Timliness

Ship Accuracy

Units Defective/Rejected

Order Management

Most companies understand the significance of order management, however, they don’t always understand the numerous ways in which 3PLs and their technology can improve these processes within the supply chain. McClain’s TMS is able to integrate with all ERP systems so when a customer creates an order, a carbon copy of that order is sent into the TMS. At this time, all line item information is now visible and ready for analysis with shipment data.

Inbound Collect

PO Management

As your 3PL provider, our goal is to use this stored information to build the largest, most cost effective shipment by identifying potential opportunities to combine your POs to reduce the number of shipments, subsequently decreasing unit cost. Throughout the life cycle of the order, McClain is proactively monitoring the shipment, making sure it is both ready to ship on time, and once picked up, delivers on time.

Arming McClain with this data alleviates the client from the guessing game and pressure to follow up. When these procedures and integrations are in place, McClain can ensure down to each individual line item, that the order is complete and shipped in the most cost and time efficient manner. If an order is not going to make delivery, or is short shipped, we will work with both shipper and vendor to appease the issue. As the shipper reports progress to the McClain, these updates will be manifested with all other relevant shipment and order information. At this time, clients can log into their portal and see instant updates on their shipment.

Outbound Prepaid

SO/CO Management

Through an integration to your ERP system, we are able to receive an electronic transmission of your SO or CO data. Not only does this store all of your SO/CO information in a centralized location in conjunction with all shipment data, but it reduces time and errors made from manual entry of shipment data. When these processes are in place, your shipping manager is able to search the SO/CO when creating a shipment, decreasing the time spent manually creating the shipment. This integration provides McClain and our clients with visibility of all pending orders.

Freight Pay and Audit

Rather than receiving individual invoices from multiple carriers, McClain takes responsibility for all invoices. When an invoice is received, the billed amount is electronically compared to the quoted amount in our system. If these amounts are the same, the invoice gets approved and the client is billed based on their individual invoicing agreements with McClain. If the billed amount varies from the quoted amount due to a possible assessorial, reclassification, or reweigh, a case is created and the CSR is responsible for resolving these discrepancies prior to the client receiving the invoice. All accessorials, re-weighs, and reclasses, are meticulously tracked for client accounting purposes and yearly negotiations with carriers.

Business Intelligence

Salesforce’s native features provide exceptional analytic building tools. When shipment and order information is centralized, not only is time saved, but errors caused by manual entry are avoided. This allows clients to accurately manage and analyze transportation costs and execution performance data. These features provide greater flexibility in modifying standard reports or creating entirely new ones, with the ability to export to excel or email directly from the system on a scheduled or on demand basis.

As the saying goes, knowledge is power. This “big data” gives companies power, and control. What the above metrics, as well as many more, give executives and logistics managers is the knowledge, control, and ability to streamline processes and save both time and money. This information can provide personnel at all levels an instant snapshot of their KPIs, while highlighting those that need immediate attention.

Compiling PO and freight information into a centralized location allows current and historical data to be analyzed. From this analysis, exceptions are identified and procedures are implemented to mitigate potential risks from recurrence. Using exception management dashboards and alerts to identify these potential risks focuses time on those shipments in jeopardy or in need of immediate attention.

Business Intelligence Metrics

Total Freight Spend

Average Cost Per Mile, Pound, Unit, Etc.

Average Carrier, Vendor, Client, Shipment Cost

Outbound Freight as a Percent of Net Sales

Inbound Freight as a Percentage of Purchases

Accuracy of Transit Times

Vendor and Carrier Compliance

Claims as a Percent of Freight Cost

Employee Key Performance Data

Through PO/ERP Integration we were able to reduce short ships from our vendors and build bigger shipments to optimize lanes. We minimized inbound shipments and can now hold our vendors accountable. – Safety Products Manufacturer

SUPPLY CHAIN SERVICES

At McClain, we have a hands on and conversational approach to our supply chain consulting services. Each client is different, and as such, their supply chain needs are different. We will perform an analysis of your past freight invoices to uncover areas for savings and initiate route optimization and load planning. McClain & Associates utilizes our industry expertise and years of experiences, as well as our knowledge of our clients industries to remedy current supply chain challenges, and prepare for and mitigate future issues. We understand that both uncovering cost efficiencies and maintaining positive customer service are priorities. At McClain, are committed to properly addressing both concerns.

Whether your company is in need of a complete supply chain overhaul, or you merely have a few questions you’d like answered by industry professionals, we can help. We collaborate with your employees at all levels to provide a fresh set of eyes and implement procedures and technology that improve customer satisfaction, decrease costs, and optimize your overall supply chain.

ALL Companies Benefit from a Transportation Management System (TMS)

Many companies question their need for a Transportation Management System (TMS). Maybe you have an in-house TMS built years ago that works “just fine”. Maybe you think it will be expensive and the ROI doesn’t seem worth the time and effort it would take to implement, and you wouldn’t be the only one. Maybe you think no company will be able to meet all of your complex needs. Whatever it is that’s holding you back, it’s costing you cash, inducing employee burnout, wasting time, and probably having negative effects on customer service and possibly JIT inventory.

Implementing a TMS helps you look at your transportation program as a whole, not just the flat cost of the freight. Decisions that you make surrounding your freight have not-so-obvious costs that are often not quantifiable. For example, do you know how long it takes for your accounting team to audit freight bills and request corrections? How do you know they are catching all the mistakes? LTL invoices are incorrectly billed 3% of the time by an average of $119.36! Wouldn’t it be nice to have this process automated!?

By implementing a TMS, all of your transportation data and information is in one place allowing all members of your organization quicker access to quoting, scheduling, and tracking tools. For example, when a customer calls a CSR, Sales Rep, really anyone in your company, wondering where a shipment is, a quick TMS search will give you real-time tracking info instantly. Additionally, modern transportation management systems can send automated notifications when an order ships, providing a link for customers to access real-time tracking without even having to contact you.

2. TMS’ Create Warehouse Effencies

A TMS reduces the time spent managing freight, and increases the time spent on more important tasks/projects. Furthermore, with visibility of inbound shipments, you can schedule receiving staff accordingly and reduce wait time.

If your TMS is integrated with your ERP system, you spend less time manually inputting data (and less time correcting errors). Plus, with integrations, PO and transportation data are contained in a central repository, which allows for more informed decision making and decreases risk.

3. Do You Want to be Proactive or Reactive?

If current situations have triggered an assessment of your transportation needs, you’re operating with a reactive design. If you are looking into the future and considering events that aren’t in the process of happening right now, you are (luckily) operating proactively.

When historical incidences of problems and the factors leading up to and causing them are analyzed, processes and procedures can be put in place to prevent them from happening in the future. By implementing an exception-oriented process to trigger alerts to stakeholders in the cases of potential problems, the effort and financial costs of uncertainty are drastically minimized.

4. Data, Big Data, and BIGGER Data

When shipment and order information is stored in a centralized location, the metrics rendered are invaluable. Not only is time saved, but errors caused by manual entry are avoided allowing clients to accurately manage and analyze transportation costs and execution performance data.

When assessing the transportation systems of a potential client, we always as them to provide 30-90 days worth of shipment data. For some customers this is almost impossible and a daunting task. These are the customers who need a TMS the most. Without the ability to analyze historical shipment data, they are unable to (at minimum):

Leverage carrier/vendor compliance data to negotiate better rates

Uncover opportunities for route optimization

See if transportation costs are rising and determine the underlying issues

Have an accurate P&L

Long Story Short

Long story short, companies of all sizes benefit from transportation management systems. Good 3PLs will provide you with some options, force you to modify processes, and maybe save you some cash. GREAT 3PLs will become your partner. GREAT 3PLs will work with you to analyze your processes for potential improvements, mold their processes to match yours, and customize their technology to match your unique needs.

If you want more information on a GREAT 3PL, give us a call or shoot an email to maeze@mcclainltd.com.

For the sixth year in a row, Salesforce has been named by Forbes as one of the World’s Most Innovative companies.
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8 Simple Ways to Save on freight

Shippers near and far want to save on freight costs. Many, however, are stuck doing the same thing they’ve always done, and continue overlooking opportunities to improve customer service, increase speed, and cut costs. Regardless if you’re trying to get more control of your supply chain, reduce shipping costs, or gain more supply chain visibility, this post can lead you in the right direction. For more information, contact us for a demo, or sign up for our transportation industry newsletter!

Improve Packaging

Proper freight packaging is one of, if not the most, important component in the shipping process. Shipments that are packaged insufficiently suffer from insurance claims due to loss and damage, and can be subject to numerous accessorials. Further more, reassessing the packaging of your freight into a more condensed unit can increase the density and thus lower the class, directly impacting your bottom line. While splurging on more reliable packaging may increase your upfront freight costs, in the long run it’s proven to pay off.

Understand All Modes

To get the most out of your supply chain, shippers must truly understand each mode available to identify specific lanes or shipments that qualify for lane conversion. For example, converting lanes totaling more than 500 miles from truckload to intermodal can save up to 50% of total costs with little increase to transit time and in decrease in service. If you are interested in intermodal lane conversion, download our Intermodal Reference Guide, or contact a member of our intermodal department!

At times, it is more cost effective and can reduce risk to consolidate LTL shipments into a truckload, or wait a day to ship a larger quantity of pallets in one LTL shipment. On the other hand, it is sometimes more effective to break apart a truckload into LTL shipments, as this can increase your LTL buying power and prompt carriers to give you better discounts. However, to effectively make these decisions, logistics managers must fully understand the benefits and risks of each mode.

Perform a Transportation Audit

Once you understand all possible modes and the benefits of each, it is time to perform a Transportation Audit. If the idea of a “Transportation Audit” seems daunting to you, you are not utilizing transportation technology effectively. Logistics companies, and companies who utilize the expertise of these 3PLs, perform transportation audits daily, using standardized algorithms and reports to automatically generate this information. Those, however, who are not reaping the benefits of these services, are the ones who could benefit the most from this sort of audit, as tedious as it may be. Compiling shipment data, from all carriers, locations, vendors, customers, etc. can reveal discrepancies in quoted vs invoiced amounts; inaccurate accessorials; inaccurate invoices; missed opportunities for consolidation; overlooked opportunities for route optimization; gradually increasing freight costs overtime; and many more. When these areas are identified, procedures can be put into place to prevent these errors from reoccurrence. Luckily, 3PLs are masters of these audits, and reduce the time and stress of this sort of analysis.

Process Improvement

Process improvement is an area all companies should continually be improving upon. Using the metrics provided by your TMS, you have the visibility to see problem areas within your supply chain, and can prioritize solutions based on those areas in need of immediate attention. Some examples of process improvement include: implementing EDI/API integrations, increase visibility of important information to all stakeholders (through TMS), knock down silos that separate departments and discourage communication, to name a few.

Increase Your Buying Power

There are multiple ways to increase your company’s freight-related buying power. What companies don’t realize, is that uncovering buying power within their current processes is extremely simple. One way, is to take control of your inbound freight. When shippers change their shipping terms from “Prepaid & Add” (Vendor pays for the freight, and then charges their customer back, sometimes with an additional fee) to “Collect” (carrier bills consignee directly) they are able to negotiate better discounts with carriers and avoid additional fees charged by their shippers. Another way to increase buying power is to convert full truckloads into LTL shipments, however, this is not always more cost effective in the long run, so all options should be weighed.

Your Digital Supply Chain

Does your company have plans to upgrade it’s supply chain? According to the attached info graphic, 94% of companies surveyed expect that within 5 years, organizations will receive more real-time status updates from across the entire supply chain. So, why wait 5 years!? McClain & Associates can revolutionize your supply chain and arm your company with the visibility and technology to ensure you are prepared now, and into the future.